Abuse of Eminent Domain

January 26, 2001

The Fifth Amendment states that private property shall not be "taken for public use, without just compensation." But what is a public use? With increasing frequency, public officials are using eminent domain to take land from current property owners and transfer it to private businesses wanting the property for their own use and profit.

For instance, developers seeking land to build a $200 million complex containing a health club and other facilities in New London, Conn., enlisted the aid of city officials to acquire 21 private properties through eminent domain.

But there is evidence of a backlash against public officials who cavalierly threaten to invoke eminent domain on behalf of acquisition-minded developers.

In 1998, a New Jersey judge rejected a request by state officials to condemn three properties, including the home of an elderly widow, so the Trump Plaza Hotel and Casino in Atlantic City could expand.

In Maryland, two proposals to broaden the condemnation powers of local officials were soundly defeated at the polls last November.

The owners of about 60 buildings in Pittsburgh were threatened with eminent domain for a $550 million shopping and entertainment district downtown -- until the project was finally abandoned.

As for the New London case, the Institute for Justice filed suit in December on behalf of seven property owners against the city and two redevelopment organizations.

Some local officials try to stretch eminent domain to advance redevelopment projects by arguing that the projects constitute a "public benefit," that they are "saving neighborhoods" and that the results will reduce crime and generate taxes.

But Institute for Justice attorney Dana Berliner labels "unconstitutional" the kind of "pure, naked transfers of land from one owner to another person who you think is going to make a better profit off of it."